If "it" is a noun, what is it? If instead, "it is" is the 3rd person present verb to-be, what is the subject of the sentence? (How is it grammatical to have a sentence consisting only of two verbs in that case?)
You have asked exactly the right question.
What is the subject of the sentence?
You know that an English sentence has to have at least a Subject and a Verb.
In the sentence It is raining, the Verb is easy to pick out: is raining, the verb RAIN in the present progressive construction.
But what is raining? Does the sky rain? Do the clouds rain? Does some Raingod rain? Is there anything or anybody which actually does something when rain falls? Not really.
But an English sentence has to have a Subject. So we cheat. We use it. We call this kind of it a dummy, something which we use instead of something real, like a tailor's dummy, or a ventriloquist's dummy, or a crash dummy.
It in it is raining isn't something which actually exists: it's a dummy which only there because we have to have a Subject.
Because of the context of your sentence, it refers to the weather, since only the weather can rain.
It is raining
It is snowing
It is windy
It's howling out there
It's bucketing (means raining extremely hard)
can all be understood to refer to the weather which is usually considered genderless
It is hot
might elicit a response of What is hot? if the subject is not immediately apparent since many different things can have a high temperature.